Rice import rebidding fails; prices still easing

The governments of Thailand and Vietnam did not agree to the reference price set by the National Food Authority (NFA) for the supply of 203,000 metric tons (MT) of rice on Tuesday, which led to the failure of the second round of bidding.

The failed rebidding was supposed to firm up the remaining volume that was not procured during the previous auction, wherein only 47,000 MT of rice were bought.

Both Thailand and Vietnam’s price offers at $480.80 and $483 a ton, respectively, were higher than the NFA’s reference price of $447.88 a ton.

Under the NFA’s guidelines, both parties may make another offer within the day, but even the countries’ second price offers were still too high at $480.50 and $481.50.

In an interview with NFA assistant administrator Maria Mercedes Yacapin, she said that the agency’s reference price—described by traders who talked to the Inquirer as “too low”—were based on the prevailing trends in the international market.

“This is based on our study. We do our own world market monitoring of prices,” she said.

Asked whether the failed bidding would affect the arrival period of the imports, Yacapin said they would have to consult the NFA Council.

Under NFA’s terms, the volume should arrive in the country in two tranches—the first no later than Dec. 15 and the second must arrive no later than Dec. 31.

An additional 500,000 MT of rice are also set to be procured next week under the open tender scheme, wherein the government will transact with the private sector.

About P18 billion worth of subsidy from the government’s treasury is expected to be allocated for the importation program.

Since the arrival of rice imports, rice prices have been going down for four consecutive weeks now and these are expected to decline further with the arrival of more affordable rice.

As of the third week of October, data from the Philippine Statistics Authority showed average retail price for regular-milled and well-milled rice at P45.72 and P48.83 a kilo, respectively. These were lower by 0.33 percent and 0.35 percent from a week ago, but were still higher by 20.22 percent and 15.68 percent from the previous year.

While prices may not go back to its previous levels, the Department of Agriculture is banking on the imposition of the suggested retail price on rice varieties as a measure to tame prices and ease the burden of consumers from high food costs.